FEATURE: Mobilising resources for climate compatible development – Insights from CDKN’s experience
Juliane Nier, CDKN’s Learning Coordinator, reports from a workshop convened by CDKN to share experiences among our partners on how to finance climate compatible development. Hosted by the Government of Rwanda in Kigali last month, the participants identified the ‘ingredients’ needed to mobilise resources.
“I have to travel to Rwanda to find out what a neighbour is doing”, one Colombian participant said with astonishment following a presentation about Peru’s ambition to mainstream adaptation into national public investments. Neighbouring countries may have many insights to share with each other on climate action but it takes a concerted effort to bring them together – in this case, a completely global effort!
Government representatives from 12 countries across Africa, Asia, Latin America and the Caribbean came together in Kigali, Rwanda 22-24 July to share experiences, lessons and emerging practice on mobilising resources for climate compatible development.
There has been great progress in designing low carbon and climate resilient plans and strategies. These often involve the preparation of vulnerability and risk assessments, analysing the economic impacts of climate change and drafting inclusive action plans at the state and subnational level. As we reflect on lessons learned from planning processes governments are now starting to shift into implementation and delivery mode.
There are no blueprints or how-to-guides to implementing these strategies. But there are great examples and experiences emerging as governments test different approaches in their contexts. The Government of Rwanda, represented by the Ministry of Natural Resources (MINIRENA) capitalised on this opportunity and hosted the South-South Learning Exchange in Kigali, organised by CDKN.
The Minister for Natural Resources, Dr Vincent Biruta, opened the Learning Exchange. He said it provides the opportunity to build connections, to reflect and to improve the delivery of climate interventions.
Three themes were on the agenda: 1) what key ingredients are needed to mobilise resources for climate action; 2) what sources of finance are available; and 3) how are national funding mechanisms emerging and performing.
The 50 participants brought a commitment to honest learning about country experiences and curiosity and appreciation for stories of emerging practice. We heard about success stories and beautiful mistakes. These stories and experiences formed the basis of discussion and allowed for deeper insights to emerge.
With the aim of digging deeper and uncovering why things work well or don’t work, six topics were explored further as the ‘key ingredients’ for mobilising resources:
- Developing bankable projects: bankability can mean various things to different actors. We looked at it in the wider context when projects can attract or bank funds from international and national public and private sources and contribute to the national finance and development strategy. Read more about the conversation here.
- Building the case for funding adaptation: The Government of Peru shared their experience of using a risk management approach as an entry point to mainstreaming adaptation into national systems for public investments. By highlighting the impacts of disaster on their ability to provide the services they are committed to delivering, the government was able to bring different sectors on board. We heard that testing this way of working with selected pilot regions, where there is political willingness, records of public investments and available climate change information was very successful.
- Breaking strategies into actionable steps: we heard that visions are often driven at the national level while the implementation of actions takes place at the subnational and community level. Resourcing and gaps in technical capacity to deliver these actions and evaluate outcomes pose the biggest challenge, according to participants.
- Triggering supply and demand for climate finance: grant or concessional resources can be used effectively to unblock or leverage a menu of financial instruments (risk management, loans, equity, carbon credits, etc.) through smart blended finance packages, which can speed up the shift of all investment flows towards climate resilient and low emission options.
- Developing capacity: we need to shift the perception that capacity development is an added extra. Participants agreed that it is an integral part of projects and should be seen as the starting point. Capacity development for climate change must serve different needs and be practical.
- Engaging the private sector: to achieve transformational change, climate change needs to be embedded in the business case for all investments. The private sector is a major partner in sharing risks, which requires strong relationships of trust between government partners and private sector leaders. For example, signing a green protocol with the banking sector has allowed the Colombian government to build that trust and guarantee banks a seat at the table.
There was great appetite for discussing how national budgets provide an important entry point to plan for climate related activities. Developing economic impact assessments of climate change through participatory approaches can help build that case and encourage ownership of the results, as seen in the case of Peru.
Access to international climate finance, on the other hand, requires a dialogue between governments and funders to develop better use of investments and satisfy country needs. A strong vision and clarity over development priorities at the national level will support this process. In the case of Peru we heard that international finance supported pilot projects. In turn this contributed to developing an evidence base and a pipeline of bankable projects.
We heard from Bright Ntare that for Rwanda, National Climate and Environment Fund (FONERWA) has been an additional mechanism to support national priorities and help scale a coordinated approach. Particularly countries which have either established a fund already or are just about to do so, were interested in FONERWA’s private sector strategy and approaches to monitoring and evaluating the impact. Dalberg’s research highlighted that private sector support must be sufficiently incentivised and is easier to attain when projects are commercially viable.
Over three days we shared experiences, discussed different approaches to questions that no one seems to have the answers to and drew out lessons that can be tested in other contexts. Participants developed action plans and committed to pursuing them further with their own stakeholders. CDKN will continue to monitor how this rich interaction will result in concrete action steps in selected priority countries. This will help assess the effectiveness of South-South learning exchanges in the context of climate change and ensure continuous improvement in future support and messaging.